Earlier this week, Lindsey Stroud (Director of the Consumer Center at TPA) submitted commentary and a video to the National Assembly of Serbia regarding harm reduction. First, it was an amazing opportunity for Lindsey to talk directly to lawmakers in another country about harm reduction. I can’t think of anybody more qualified than Lindsey to talk about the issue. The real eye-opening aspect of Lindsey’s commentary was how she equated tobacco harm reduction with other forms of harm reduction such as seat belts. What a smart connection. Seatbelts have saved millions of lives and the government rightly promotes their use. So, why is the government dragging their feet on tobacco harm reduction? Vaping and heat-not-burn technology have been proven to be 95% less harmful than traditional cigarettes. If consumers have universal and immediate access to seat belts, why not tobacco harm reduction products? Lindsey will be writing a lot more on this connection, and personally, I can’t wait to see more of her research and writing.
Buck Should Stop Here
A bipartisan group of members of the House Judiciary Committee’s Antitrust Subcommittee, with the Republicans led by Congressman Ken Buck of Colorado, released a package of five bills targeting the American tech sector. Right away, this narrow focus on changing the antitrust rules only for predominantly online firms reveals the misguided nature of the legislative package. The specifics of the bills aren’t any better, from arbitrary rules that will cause endless consumer headaches and security issues to empowering unelected bureaucrats to promulgate new rules that circumnavigate the legislative process and reshape our economy. By focusing these bills on online platforms, legislators are ignoring the competition that the affected firms face in the offline world. Amazon doesn’t just compete in online sales, it competes against traditional brick and mortar retailers. Similarly, Google and Facebook compete against traditional media in advertising. Should these narrowly targeted reforms on the online side of these markets go through, competition in the totality of these markets will be harmed by tying the arms of only some of the competitors.
Getting down to the specifics of these bills, they range from bad to ugly. Amazon would be banned from selling often-cheaper Amazon-branded products (something all of their brick and mortar retail competitors have always done). Google would be prohibited from showing Google Maps or Google Reviews in their search results if you are searching for a local business. Apple could be barred from pre-loading its own applications, such as word processors and web browsers onto iPhones and Macs. Facebook would undoubtedly be forced to sell Instagram and WhatsApp, eliminating the existing interoperability between these services. The list of conveniences consumers have come to take for granted and potentially banned by this kind of reform is practically endless.
Another bill flirts with flipping the burden of proof in antitrust proceedings on its head. The bill rather explicitly puts the onus on covered firms to prove their acquisitions will not harm competition. In short, guilty until proven innocent. One part of the package mandates covered firms share sensitive customer and business data with competitors. Should Amazon be forced to share this information with a competitor based in another country, such as China-based Alibaba? Or Facebook and China-based TikTok? It’s easy to imagine how such a provision could make troves of data widely available and thus easily exploitable by nefarious actors. Even the most benign bill in the bunch has major problems. It boosts funding to antitrust enforcers but lacks necessary constraints on how the Department of Justice and Federal Trade Commission (FTC) use the increased funding the bill provides. It is no secret that the current majority at the FTC seeks to significantly expand the scope of antitrust enforcement to push policy priorities that are entirely divorced from competition policy. Congress shouldn’t green-light this undermining of the democratic and legislative process.
These policies are anything but limited government, market-based solutions. Rep. Buck and his allies shouldn’t be lending bipartisan credibility to this wildly misguided effort.
Green Bank Shot
Believe it or not, it’s still infrastructure week in Washington, D.C. A bipartisan group of senators is working on a new “compromise” infrastructure package that would cost taxpayers $1.2 trillion (yes, that’s still a lot of money). One infrastructure proposal that has gotten plenty of airtime is a “green bank,” which is essentially a taxpayer-backed lending operation for projects such as wind turbines and solar panels. Supporters claim that the idea would cost a negligible sum since the government would be doling out loans instead of grants. But in reality, the government is a horrible judge of which projects “deserve” to be funded and which should stay on the sidelines. If lawmakers really want to rebuild America, they should examine ways to remove barriers to private lending and investment. “Green” government lending is simply corporate welfare masquerading as innovative financing. This trendy idea could wind up being sold in a variety of ways, including as a non-profit divorced from the federal government. But, once $30 billion worth of taxpayer dollars gets entangled in the decision-making process, the endeavor effectively becomes a government operation. Much like the healthcare “public option” proposed at various points over the years, all the rhetorical wrapping in the world cannot transform a taxpayer-funded operation into a private or non-profit initiative.
Dispersing dollars via loans and leveraged private funds need not end in disaster if the lender in question is competent and guided by the right incentives. Even if “green” loans are a fairly new idea, experience with government grants shows that the federal policymakers fail at parsing out profit. For example, the Department of Energy’s Advanced Research Projects Agency-Energy (ARPA-E) program has a poor track record in finding and funding the next great “green” idea. A study conducted in 2017 by the National Academies of Sciences, Engineering, and Medicine provides patent and investment statistics, as well as case studies, on these DOE endeavors. The authors find that of all DOE research programs, ARPA-E-funded projects lead the pack in generating follow-up research. The catch is that all of the ARPA-E projects have been lackluster. The analysis finds that “recipients of 44 percent of ARPA-E awards published at least once, compared with the Office of Science and EERE at 27 percent and 18 percent of awards, respectively.” The authors choose to focus on ARPA-E awardees’ relative success in publishing their results. But, the inability of most awardees in any program to publish should be concerning to taxpayers. And subsequent outcomes are hardly encouraging. Nearly three-quarters of ARPA-E projects designated as “completed” have no market engagement whatsoever — no private funding or company formed around the research. And even that figure is probably excessively kind because the academics (somewhat shadily) include in their definition of “company formation” recipients who had founded firms prior to receiving ARPA-E funding.
In theory, it could be the case that “green banking” is more successful than traditional government grants due to a more innovative financing model. It’s important to remember, though, that failed government projects such as Solyndra started out as loans. And states such as New York and Connecticut have already been experimenting with green banking, but the results do not appear promising. According to a 2020 finance report by the American Green Bank Consortium and the Coalition for Green Capital, the majority of green bank investments center around “community solar” projects and nonprofit clean electricity/energy efficiency endeavors. This funding structure is perplexing given that large-scale commercial endeavors are far more cost-effective in delivering “green” energy to consumers. Consumers ultimately need access to a variety of energy sources ranging from solar to natural gas. Regardless of the source, private investors and lenders are better than governmental institutions at finding the cheapest and most effective way to keep the lights on and drive innovation. A “green bank” would be a boondoggle for taxpayers and consumers and a boon to special interests.
BLOGS:
Monday: Celebrating National Bourbon Day – And Possible Future USPS Liquor Delivery
Tuesday: Commentary to the National Assembly of Serbia Regarding Harm Reduction
Tuesday: Republican Obsession with ‘Big Tech’ Hands the Dems a Antitrust Club
Thursday: FDA Advisor Exits Show Need for Reform
Friday: Ken Buck and House Dems Set to Widen Digital Divide Through Antitrust
MEDIA:
June 11, 2021: Real Clear Markets ran TPA’s op-ed, “Republican Obsession with 'Big Tech' Hands the Dems an Antitrust Club.”
June 12, 2021: The Post Journal (Jamestown, N.Y.) mentioned TPA in their op-Ed, “Joe Biden’s EV Charger Strategy.”
June 12, 2021: Foxbusiness.com quoted TPA in their story, “G-7 leaders hammer out a global minimum tax for companies. Here's how it would work.”
June 14, 2021: WBFF Fox45 (Baltimore, Md.) interviewed me about the IRS releasing personal tax information.
June 15, 2021: The Center Square ran TPA’s op-ed, “FDA advisor exits show need for reform.”
June 15, 2021: Townhall.com ran TPA’s op-ed, “‘Green Bank' Would Be Boondoggle for Taxpayers and Consumers.”
June 15, 2021: The Virginia Journal of International Law posted TPA senior fellow Ross Marchand’s postal essay, “International Postal Governance: Avenues for Reform.”
June 15, 2021: WBFF Fox45 quoted TPA in their story, “City Housing Department under Fire…”
June 16, 2021: VP of Policy Patrick Hedger appeared on the Charlie James Show on 106.3 WORD FM (Greenville/Spartanburg, S.C.) to discuss tech and antitrust.
June 17, 2021: WBFF Fox45 (Baltimore, Md.) interviewed me about Port Covington.
June 17, 2021: Washington Examiner quoted TPA and VP of Policy Patrick Hedger in their story "The Ending Platform Monopolies Act targets Big Tech."
Have a great weekend!
Best,
David Williams
President
Taxpayers Protection Alliance
1401 K Street, NW
Suite 502
Washington, D.C. xxxxxx
www.protectingtaxpayers.org
